Indol treated with ethylchloroacetate in presence of anhydrous K2CO3 was converted into ethyl-3-indoloacetate. This compound on refluxing with semicarbazide results into 1-(3’-indoloacetyl) semicarbazide 2. Overnight treatment of compound 2 with conc. H2SO4 followed by neutralization with liquid ammonia gives 2-ammino-5-( 3’- indolomethylene)-1,3,4-oxadiazole 3. Mixture of compound 3 and anisaldehyde in presence of glacial acetic acid refluxed in absolute ethanol to obtain 2-( substituted arylidenylamino)-5-(3’ – indolomethylene)-1,3,4-oxadiazole 4(a-e). Mixture of synthesized compounds, anhydrious ZnCl2 and thioglycolic acid, refluxed in dry DMF, resulting derivatives 1-[5’-( 3”- indolomethylene)-1’,3’,4’- oxadiazol-2’- yl-]-4-(substituted phenyl)-2-azetidinone 5(a-e).The structure of the hitherto unknown compounds have been confirmed from analytical and spectral data. The newly synthesized compounds were screened for antihypertensive activity.